2152

THE NEW ZEALAND GAZETTE

Decision No. 13/87

Before the Broadcasting Tribunal

IN the matter of Broadcasting Act 1976, and in the matter of
applications for television warrants:

Chairman: B. H. Slane.

Members: Ann E. Wilson and Robert Boyd-Bell.

Co-opted Members: G. J. Schmitt and W. Kerekere.

REASONS FOR RULING

Dated the 22nd day of April 1987

AOTEAROA BROADCASTING SYSTEM INC. ("ABS") applied to the
Tribunal to amend its television warrant applications to an
application for a programme warrant to accommodate an
arrangement to be entered into with Independent Television (ITV)
Ltd. ("ITV") for ABS to supply and broadcast programmes on ITV's
third television service if ITV companies should be granted the
television warrants for which they had applied.

On 14 August 1986 in Decision No. 11/86 the Tribunal declined
the application to amend.

On 31 October 1986 counsel for ABS, by memorandum of counsel
dated 28 October 1986, sought leave to adduce evidence, a draft of
which was annexed. The draft evidence was submitted as calculating
"the almost complete cost of a programme warrant and its
production, including the separate provision of much of the
equipment, premises and staff from the 'ground up'."

Counsel also sought further written evidence from the BCNZ as
to what it proposed for autonomous Maori television.

There was difficulty in arranging a suitable time for one of the
counsel for ABS to be heard on the application. Counsel for ABS
decided to make no further submissions in support and the Tribunal
heard other counsel on 12 November 1986. When the transcript
had been conveyed to counsel for ABS a reply was filed in writing
on 21 November.

There had been no indication between 14 August and 31 October
of the intention of ABS to apply for leave to file further evidence.
In the intervening period the Corporation's motion for review in
the High Court had been dealt with on appeal by the Court of
Appeal. At the direction of the Court of Appeal the Tribunal heard
the parties on the question of whether or not any further evidence
should be heard from the BCNZ. That application was granted on
conditions.

In support of the application to amend Mr Gault said that ABS
had been unable, because of the expressed intention of the BCNZ
to withdraw support, to call evidence relating to the financing of
its proposals. ABS would therefore stay with its interim decision
not to call further evidence on financial or commercial matters. In
1985 ABS had applied for leave to amend its evidence and the
Tribunal had required a schedule of the amendments to be filed.
That was never pursued as it was later said to have been overtaken
by events.

Mr Gault referred to the Tribunal's ruling of 14 August declining
ABS's application. The Tribunal had indicated that one possibility
was that it could impose conditions requiring arrangements to be
made by a successful applicant for autonomous Maori broadcasting
through a programme warrant holder or some other arrangement
if this were thought to be appropriate. He also referred to the
Tribunal's statement that:

"Since submissions can be made on the desirability of Maori
programming conditions it is actually premature to be
considering now an amendment application for a programme
warrant before the Tribunal's position on Maori broadcasting
and programmes has been established."

Mr Gault submitted that the Tribunal's position could be
established only upon evidence. The extent of any conditions
imposed and the ability of each of the applicants to meet the
conditions within the terms of its own application could be
established only if the Tribunal had the necessary evidence to enable
it to come to a determination on those matters. He submitted that
the financial commitment on the part of a warrant holder in
accepting Maori programming conditions would extend beyond mere
substitution for the costings already provided by applicants for local
content. It would be impossible for the Tribunal to impose such
costs through conditions without canvassing the costs with applicants
in order to assess their ability to meet them. Leave was therefore
sought to adduce evidence.

It was submitted that each applicant would be able to
accommodate a large proportion of the expenditure within presently
proposed structure and budgets. It would be for applicants to identify
the additional or incremental costs to them of complying with such
a condition and to satisfy the Tribunal they could meet them. The
draft evidence produced by ABS consisted of detailed financial
estimates both of income and expenditure, particulars of equipment
requirements, some staffing information and a commentary on the
estimates as well as a description of the programme material on
which they were based.

Opposing the application Mr Baragwanath said the evidence did
not relate directly to the proposed service contained in the respective
applications, rather to some other service which, it was claimed,
would be desirable in the public interest. He submitted that the
Tribunal could approach the issue in general terms and, if that were
the Tribunal's view, it should impose relevant conditions when it
issued a warrant to a successful applicant and it would then be
appropriate to get into the fine details.

Mr Baragwanath said that if the Tribunal accepted the course
proposed by ABS then it would have to require all the other
applicants to consider the consequences to them, to respond in detail
and to file further evidence. The Tribunal had already refused Mr
Thomas leave to do that. The Tribunal should reject the evidence
in its present form but if it wished to take a general broader approach
it should require ABS to recast its evidence.

Mr Thomas supported the application but said he was somewhat
embarrassed in doing so as it would involve the Tribunal in reversing
its earlier decision excluding evidence which ITV had sought to
produce on the way it would accommodate a condition which would
allow a substantial measure of Maori programming. He agreed with
Mr Baragwanath that there was more involved than the admission
of the evidence which ABS sought now to adduce. Counsel for the
applicant had suggested the extent of any conditions to be imposed
and the ability of each of the applicants to meet the conditions in
terms of its application could be established only if the Tribunal
had the evidence necessary to enable it to come to a determination.
The financial commitment on the part of the warrant holder in
accepting conditions would extend beyond mere substitution for the
costings already provided by applicants for local content. It would
be impossible for the Tribunal to impose such costs through
conditions without canvassing the costs with the applicants in order
to assess their ability to meet them. It would be for applicants to
identify additional or incremental costs to them. It would be
necessary for the Tribunal to reverse its earlier decision. Mr Thomas
argued that the Tribunal's ability to impose a condition relates to
and turns on the evidence that is being sought to be adduced not
by ABS but by the other applicants as a consequence.

The Tribunal was therefore being asked to consider a move which
would require other applicants to produce further evidence.

Mr Miles referred to the significance of the expenditure involved
which would amount to a fifth of the total planned expenditure of
Southern Cross.

He submitted that the Tribunal would not have jurisdiction to
impose a condition which had such a significant and massive effect.
He said it required a very detailed assessment of whether the
costings were accurate or not. That would significantly lengthen the
hearing. Mr Miles said the position was different from that of the
Corporation on which the Court of Appeal's decision had been based,
because of its very special status under the Act. ABS was just another
applicant.

Mr MacRae submitted that there was a considerable difference
going to jurisdiction between a condition which sought to enforce
an agreement between an autonomous broadcaster and a warrant
holder or a prospective warrant holder, and a condition which sought
to impose on an unwilling prospective warrant holder the full terms
of an arrangement by which autonomous broadcasting would be
undertaken.

Mr Impey suggested that the end result of the consideration would
be a combination of additional costs and very substantial changes
in revenue so that the status of the applicants would be quite
dramatically different. There would have to be comment on ABS's
costs. His client's preliminary assessment was that they were
substantially under-budgeted.

There would also be an impact on revenue. These were
substantially matters that had been canvassed previously by the
Tribunal in its ruling of 14 August.

In response, by memorandum, Mr Gault said that the actual cost
to an applicant was the very subject on which ABS sought to have
other applicants give evidence. He said there must be evidence to
form a basis for the Tribunal to impose an appropriate condition.
It was this evidence which was offered.

He conceded it may be open to the Tribunal to impose conditions
without there being an adequate evidential base but if there were
insufficient evidence any decision may be rendered futile if the
successful party could not meet the costs. He said that evidence
was not being produced to urge the adoption of a particular
programme production schedule or to deal with the condition in a
particular way.